First Majestic

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#1 Thu, Jan 2, 2020 - 6:35pm
silverseeker
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First Majestic

I'd like to open this thread and list a few catalysts for 2020. I am hoping there will be many additional posts with further details, and I look forward to reading this convenient rolling discussion!

In reference to the recent Seeking Alpha article and Keith's interview; after which I spoke with Mark Corruthers, (Investor Relations); and we reviewed some of the slides in the Nov 28th Corporate Presentation.

  • First Majestic is now over 90% Precious Metals with San Dimas and Santa Elena producing 20 Million AgEqvOz @ ~ $7.00 AISC.
  • Gold production is now over 30,000 ounces a quarter. If you are a long term shareholder, you know this was never the case up until the San Dimas and Santa Elena acquisitions. How many Gold Mining juniors are diluting shares as we speak to raise cash for a 120K ounce/year gold mine operation? I don't think 'the market' has priced this in. If Gold only hits $1600 and Silver $22 this year; you are looking at > $300M in free cash flow or ~ $30/share at ~20X multiple. The decade long chart is going to look pretty insane.
  • First Majestic shares are held in a large proportion of mining mutual funds and as a premier 'Primary Silver' leverage stock. If the sector sees inflows, AG shares are bought both directly and indirectly.
  • First Majestic owns all the land surrounding the Silvercrest Las Chispas project. Refer to pages 23-24 of the presentation. Note the drill results down near the Santa Elena Mine @ Ermitano are very similar to many of the 'world class' intercepts published by Silvercrest but First Majestic has yet to publish an initial resource model. Four surface drill rigs were active at the Ermitaño project during the last quarter. In addition, above ground earthwork activities began to prepare the area for the installation of surface facilities and portal construction. The Company is expected to release a Preliminary Economic Assessment study and updated Resource estimates on the Ermitaño project by the end of the first quarter in 2020.
  • First Majestic also has an exploration drill on the Los Hernandez claim, along the Las Chispas property line... First Majestic does not need to drill off a resource to raise cash to build a Plant up there; as Silvercrest is already preparing to build one. I do not think there is any danger of First Majestic 'hollowing out' their resource base... just highlighting the untapped potential of one of their producing properties and the obvious potential for another acquisition.

The above is clipped from recent press releases. I didn't include any of the cost saving operations; such as the new HIG mills and switch over to NatGas and roaster work at La Encantada. Sometime during the 2020s decade, I believe Silver can rally to > $100/ounce, and AG shares can 2:1 split and likely still reach > $100/share... a 20 bagger for the 2020s.

That's my opener, and kick off for the decade.

killing the banker Ponzi one ounce at a time

Tue, Jan 21, 2020 - 11:02am
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disappointing production news

Tue, Jan 21, 2020 - 12:19pm TF
silverseeker
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Transformation of the company

Hi Turd,

They hosted a conference call at 11am, which is available on the website.

I am actually very pleased with the decision to wind down Del Toro operations, which was their last small scale mine from early days. This completes the company transformation into three major mining operations with a tightly focused capital and development program for 2020. First Majestic is now a nearly 100% pure Silver play with >100k ounces/ year of Gold by-product credits.

Rather than spreading capital around to a now extensive portfolio of boutique scale operations, they can switch to proper green field development of these assets if the Silver price rises without burning up the operations at near break even prices.

I see in the 2020 guidance a mention of Los Hernandez drilling, which is AGs land package surrounding the Silvercrest project. If you look at the vein system Silvercrest is drilling presently, it seems a healthy speculation that those veins are running right onto the Los Hernandez property, which is totally under the radar. If you look at the Gold contained in the Las Chispas drill intercepts, it amazes me that the market isn't looking at the district area potential, which is owned by First Majestic, yet not reflected at all in the valuation.

killing the banker Ponzi one ounce at a time

Mon, Jan 27, 2020 - 5:58pm
bruinjoe
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Here are some key points I

Here are some key points I took from the call

<< Over the last couple of quarters, we've been very, very lucky and have had some great grades and that mine has been making some substantial profits in the last couple of quarters. But in 2020 we're being a little bit conservative. We've dialed back the grades a little bit and also dialed back production a little bit. So that's why it looks like it's slightly higher cost, because it's just us being conservative. Of course, the geos and all the engineers inside her are hoping to maintain Q3 and Q4 grades, but when it comes to public disclosure and guidance, we have to shy upon the conservative. >>

Sounds like they are erroring on the safe side with regards to the ASIC and grade.

<<Another thing that investors and shareholders should know is three years ago we had seven mines operating. And as we had very successful acquisitions of our two last purchases, the Santa Elena and San Dimas mines, those two mines are really generating the majority of the production and most of the profits and it just makes business sense to really focus our efforts on those two mines. And unfortunately, the smaller mines which were producing only really around 1 million ounces or less each, insignificant really in the whole scheme of things, it just didn't make sense to continually pushing silver out of those mines and losing money on those ounces. >>

Check out that last sentence. . They were actually losing money from those small mines! Those small mines must have poor grades. They will probably bring it back online once the silver prices are higher. The market did not like the lower guidance on ounces produced but it makes sense to stop production. Would the market like more ounces but less profibility? That's the reaction in the share prices but it is the wrong reaction. There is no reason for First Majestic to get hammered for being prudent.

Wed, Jan 29, 2020 - 6:20pm bruinjoe
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2020 Guidance

Good summary Bruinjoe.

I recall during 2009-10; AG was bringing La Encantada on line to double Silver production just as the Silver price started to rise. Their stock value rocketed, allowing additional acquisitions, etc. I expect they will do this again during the next Silver Bull market, and will have these smaller operations properly drilled off and ready to capture the leverage to a rising Silver price. Concentrating on their Silver/Gold operations in 2020 and maximizing efficiency will set the table for the next decade.

If Silver lags over the coming months, adding shares with a multi-year view will likely yield multi-bag returns as this stock usually leads the sector higher.

killing the banker Ponzi one ounce at a time

Tue, Feb 4, 2020 - 10:25pm
silverseeker
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Keith Neumeyer- Mining CEO of the Year

Kitco News- Mining CEO of the year

Congrats to Keith and First Majestic. I bet Keith was pleased to see Silver mentioned as a 'conviction buy' at Davos.

You can imagine some accumulation is occurring the last few days...

killing the banker Ponzi one ounce at a time

Sun, Feb 16, 2020 - 5:11pm
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New SGTReport interview with Keith Neumeyer

Link: Sgt Report Feb 16th w Keith Neumeyer

Keith mentions he is buying physical Silver regularly and just added 200 Silver Maples... How many mining CEOs actually 'walk the walk' like Keith?

He also provides some good details on First Mining Finance, with Sean asking several great questions. Due to the now sustained increase in the Gold price, lower grade ore is economic and therefore getting mined; even by the so called 'Silver' primary producers (AG included), while conversely; near break even Silver pricing is reducing Silver mine exploration; certainly a precursor to the dynamics now persistent in the Palladium market.

Reap what you sow: the Silver industry is not likely able to bang out a ton of new Silver; even if prices rise rapidly and a rabid monetary demand component appears.

killing the banker Ponzi one ounce at a time